Question

Commercial banks

• A. issue currency notes
• B. accept deposits from customers
• C. provide loan to customers
• D. both (B) and (C)

Hint:

Remember, the central bank prints the money. Commercial banks take your deposits and give out loans.

Answer 1

The Correct Option is D

Let's examine the roles of commercial banks:

(A) issue currency notes: This function is exclusively performed by the central bank of a country (e.g., the Reserve Bank of India, the Federal Reserve in the US), not by commercial banks.
(B) accept deposits from customers: This is a primary function. Banks accept various types of deposits, such as savings, current, and fixed deposits.
(C) provide loan to customers: This is also a primary function. Banks use the money from deposits to provide loans and advances to individuals and businesses.
Since (B) and (C) are the two main primary functions of commercial banks, the correct answer is (D).